Lower Surplus Puts Squeeze on Education

Together, they spell an even tougher political struggle this fall
over education spending than members of Congress and President Bush may
have expected when they left town in August.

Not that anyone anticipated an easy time, especially on an issue as
politically charged as education. President Bush wants a $2.3 billion
increase for the Department of Education; Democrats want much more,
citing education legislation Congress is trying to complete this fall
that would impose higher demands on states and school districts to
improve student achievement.

But coming up with the money is now further complicated, since the
estimated federal budget surplus has shrunk dramatically—by about
$122 billion this year and nearly $130 billion in fiscal 2002, compared
with May figures, according to the nonpartisan Congressional Budget
Office. The White House Office of Management and Budget has similar
numbers for the short term.

While the estimated surpluses for this year and next are still
sizable—$153 billion and $175 billion, respectively, the CBO
says—virtually all of that is in Social Security funds that
politicians of all stripes have vowed not to touch.

"What we have here is a political problem that does not square with
the fiscal reality that is going to create a problem for education
funding in the fall," said Edward R. Kealy, the executive director of
the Committee for Education Funding, an umbrella group that lobbies for
higher spending for education.

"It's going to make everything more difficult to come to a final
resolution," he said.

The political situation means that big increases in special
education and the Title I program for disadvantaged students, for
instance, may be harder to come by.

"It definitely makes the outlook more uncertain," said Joel Packer,
a senior lobbyist for the National Education Association. "I think both
parties have put themselves in a box. If they hold to that, it
definitely has the effect of having much less money available for
increases."

Back From Recess

One of Congress' top priorities now that members are back from the
August recess is a series of spending bills for the fiscal year that
begins Oct. 1. So far, none of those bills has been signed into law.
The House has approved nine of the 13 bills that fund government
agencies, and the Senate five, and neither has approved the
appropriation bill covering education.

White House officials have declared in recent days that even with
tighter fiscal times amid the current economic slowdown, there is room
for the education and defense increases the president has proposed.

"We have vastly more than enough money to meet the nation's needs,"
said OMB Director Mitchell E. Daniels on NBC's "Meet the Press" on
Sept. 2. "Spending in the president's budget would go up over $100
billion to strengthen the economy, education, and [national]
security."

Mr. Daniels indicated during congressional testimony last week that
even without the Social Security surplus, enough money would be
available to pay for Mr. Bush's request under the White House numbers,
though just barely.

But Democrats, citing CBO figures, say they are not so sure. They
suggest that the president would have to dip into the Social Security
surplus to pay for his budget proposals, much less to meet the higher
spending for education and some other areas that Democrats prefer.

"CBO's new figures confirm what many of us have been saying for
months: The president's budget simply did not add up," Sen. Kent
Conrad, D-N.D., the chairman of the Senate Budget Committee, said
during a Sept. 4 hearing.

Mr. Conrad and other Democrats have been quick to place much of the
blame on President Bush's $1.3 trillion, 10-year tax cut, which he
signed into law earlier this year with support primarily from
Republicans. They say that the tax cut accounts for a majority of the
shrinking surplus over 10 years. This year, it accounts for $70
billion, according to the CBO.

Republicans note that Democrats were in the forefront of pushing for
the tax-rebate checks that began going out this summer, and they argue
that cutting taxes is a wise remedy for an ailing economy.

Democratic leaders, meanwhile, contend that it is up to Mr. Bush to
figure out how to make the numbers work under the revised budget
forecast without tapping the Social Security surplus. And Senate
Majority Leader Tom Daschle, D-S.D., said last week that using the
Social Security surplus to pay for other programs "ought not be an
option."

The president, despite unequivocal and repeated pledges to refrain
from spending the Social Security surplus on current needs, late last
week opened the lid on the so- called lockbox, at least slightly. And a
senior Republican senator, with little immediate support from his
colleagues, suggested prying open that lid completely.

"We can work together to avoid dipping into Social Security," Mr.
Bush told reporters last Thursday. "I have repeatedly said the only
time to use Social Security money is in times of war, times of
recession, or times of severe emergency. And I mean that."

The same day, during a committee hearing on the budget, Sen. Pete
Domenici, R-N.M., of New Mexico, according to a report in TheWashington Post, said of the Social Security surplus: "What's
wrong with looking at it for education right now? What's wrong with
looking at it if you need defense now? This would be the right time to
do that."

In an Aug. 29 speech to the American Legion in San Antonio,
President Bush said lawmakers should not pit education against defense
in the budget debate this fall.

"This year, we might even see our administration's two highest
priorities, education and national defense, being played off against
each other," he said. "That's the old way of doing business, and it's
time to stop it."

ESEA Raises Stakes

The budget debate comes as a 39- member House-Senate conference
committee is working to resolve differences between the two chambers'
versions of legislation to reauthorize the Elementary and Secondary
Education Act, the nation's main law for K-12 schools.

The Senate version has especially high expectations for spending: It
would authorize a total of $31.7 billion in ESEA funding in 2002, far
above the $18.6 billion spent this year, plus a dramatic influx of
funding for special education. The bill would mandate increases of $2.5
billion per year in special education aid for the next six years.

Even most of the biggest advocates for higher spending on education
did not expect that so much would actually be appropriated, as opposed
to merely being authorized, even when the overall revenue picture
looked rosier last spring.

But many Democrats have made clear that increasing the Education
Department's budget well above what President Bush proposed is a vital
ingredient to reaching an education deal, given the new demands to
improve student achievement the ESEA reauthorization will likely
impose. In fact, some have suggested that a final vote on a compromise
ESEA bill might be put on hold in the Democratic-controlled Senate
until Mr. Bush and Congress reach a deal on spending that is acceptable
to the Democrats.

The White House reportedly plans a public lobbying campaign this
week to pressure Congress to move the education bill quickly.

Given delays in completing the ESEA legislation, it now appears that
the House and Senate appropriations committees will likely take action
this month on education spending bills, even without a final ESEA bill
to help guide them. The Education Department's funding is wrapped into
a larger bill that also pays for the departments of Labor and Health
and Human Services.

When it comes to education spending, Congress has a recent record of
largess. Last year, President Clinton and Congress agreed to the
largest-ever increase for the Education Department, about $6.5 billion.
And this summer, President Bush signed a supplemental spending bill
that added another $161 million for Title I. Of course, that was
accomplished under the assumption of a large, non-Social Security
surplus, which has since virtually disappeared.

If not spent on other federal programs, the surplus Social Security
funds, rather than being stowed away in some monumental savings
account, will be used to pay down the national debt. That way, in 15 or
so years, when annual benefits are expected to exceed Social Security
tax payments, the general Treasury would have more money available to
make up that shortfall.

But some lobbyists suggest that spending on education is no less
important, even from an economic perspective.

"The very foundation of a strong economy is an educated populace,"
said Dan Fuller, the director of federal programs for the National
School Boards Association.

Read the transcript of an interview with Mitch
Daniels, the director of the Office of Management and Budget, from
"Meet the Press," Sept. 2, 2001.

According to "Democrats,
Republicans Battle Over Budget," Sept. 9, 2001, from CNN.com, Republicans and Democrats recently
offered contrasting proposals on how to curb government spending. The
article includes an explanation of the Social Security surplus and what
the impact could be if the government borrows funds in order to balance
the budget.

Ground Rules for Posting
We encourage lively debate, but please be respectful of others. Profanity and personal attacks are prohibited. By commenting, you are agreeing to abide by our user agreement.
All comments are public.